Two Washington strategists have indicated that North Korea is making increased use of cryptocurrency in a bid to evade US sanctions. According to Lourdes Miranda and Ross Delston writing in the Asia Times –
“DPRK can create their own crypto-currencies or use established ones like Bitcoin. Having their own crypto-currency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication.”
North Korea avoiding US sanctions
North Koreas’ use of cryptocurrency effectively allows them to circumvent US sanctions and all KYC and AML laws relating to bank transfers. Bitcoin and other blockchain services essentially allow North Korea to completely bypass all sanctions using a variety of means. It is almost impossible to track and monitor cryptocurrency transfer on a national level.
For example, North Korea could simply transfer cryptocurrency to a Russian wallet then to Bulgaria, then to Greece, all using their own anonymous blockchain. Miners could transfer cryptocurrencies to multiple European based wallets and make it appear as if the funds came from legitimate sources. In short, there really is no way that the US can prevent North Korea or any other countries from using bitcoin as a means of circumventing US sanctions.
The terminology used by the authors is questionable. Using cryptocurrencies to avoid sanctions is regarded as a form of “terrorism”. Despite the fact that the people of the Venezuelan people may be starving and experiencing 1,000,000% annualized hyperinflation, attempts to avoid crippling sanctions using cryptocurrency are still classified as illegitimate. The language with which we define the world of finance and politics needs to change, along with the areas themselves.
Is the USA crumbling?
The US is fast losing allies, most notably due to the Iran nuclear arms deal. As a result of the harsh US sanctions imposed on Iran, Europe was forced to align itself with China and Russia. This is a complete shift of the old alliance between Europe and the USA, further fragmented by the UK’s exit from the EU. Europe is now attempting to create a special purpose vehicle to facilitate payments to Iran for exports and imports, which would maneuver around the imposed sanctions. The payments would be settled in Euros and Swiss Francs, not US Dollars. Both oil and the US dollar are the pillars of US strength, now being heavily undermined. Additionally, the ties between the USA and Europe have vanished with the lack of a common enemy to unite the two Western demographics.
Iran is itself launching its own national cryptocurrency in a bid to avoid US sanctions, and bitcoin usage in Turkey has exploded. Venezuela is turning towards Dash and Bitcoin, despite President Maduros ill-conceived attempts to create a fiat linked to fake crypto backed by non-existent oil. North Korea’s usage of cryptocurrency is another sign that the US is being abandoned, which is already happening on the social level with fragmentation along class, gender, and ethnic lines. Bitcoin and cryptocurrencies will play a key role in avoiding US efforts to maintain financial dominance over the globe. What we are seeing is quite realistically the beginning of the end of the American empire. Once oil and the US dollar are defeated, as is happening, America will be unsustainable.
It now seems to be China, Europe, Russia, Venezuela, Iran and Turkey against the divided states of America. A global shift of power is happening right in front of our eyes, only possible with the assistance of distributed ledgers.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.